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Verizon Wireless says it will not move faster on building its 5G cellular network despite a Federal Communications Commission decision that erased $2 billion dollars' worth of fees for the purpose of spurring faster 5G deployment.

The FCC's controversial decision last month angered both large and small municipalities because it limits the amount they can charge carriers for deployment of wireless equipment such as small cells on public rights-of-way. The FCC decision also limits the kinds of aesthetic requirements cities and towns can impose on carrier deployments and forces cities and towns to act on carrier applications within 60 or 90 days.

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FCC Chairman Ajit Pai justified the decision by saying it would speed up 5G deployment, and he slammed local governments for "extracting as much money as possible in fees from the private sector and forcing companies to navigate a maze of regulatory hurdles in order to deploy wireless infrastructure."

But in an earnings call last week, Verizon CFO Matt Ellis told investors that the FCC decision won't have any effect on the speed of its 5G deployment. Verizon also said that it is reducing overall capital expenditures—despite a variety of FCC decisions, including the net neutrality repeal, that the FCC claimed would increase broadband network investment. (Verizon posted a transcript of the earnings call here.)

Verizon already building as fast as it can

An analyst asked Ellis if the FCC order would "change the sort of internal targets you have for the rollout of the small cell and 5G infrastructure and possibly allow you to go a little faster as you look out to 2019 and 2020."

Ellis responded that the FCC decision "doesn't necessarily increase the velocity that we see." Verizon is "going as fast as we can" already, he said.

Ellis said:

Our teams have been engaged with municipalities across the country on getting permits to put up small cells, whether for 4G or 5G. [We] certainly like the fact that they are providing a little more guidance for how quickly that should happen, but I don't see it having a material impact to our buildout plans. We are going as fast as we can. And while the federal-level rules are helpful, it is still a very local activity municipality by municipality. So a lot of good work going on there.

Ellis also said that Verizon's "capital expenditures for the full year [will] be between $16.6 billion and $17.0 billion." That's down from $17.2 billion in 2017 and potentially below the low end of Verizon's initial 2018 projection. In January, Verizon projected that its 2018 capital spending would be "in the range of $17.0 billion to $17.8 billion, including the commercial launch of 5G."

No guarantee of more broadband

Before last month's 5G preemption vote, Pai claimed that "big-city taxes on 5G" slow down deployment in big cities and "jeopardize the construction of 5G networks in suburbs and rural America."

Yet Pai offered no evidence that deployment decisions in rural areas are affected by permit fees in big cities. Notably, Pai's plan did not require carriers to deploy any more broadband than they otherwise would have—in fact, the carriers had already promised nationwide 5G networks.

In other words, Pai's order provided financial benefits to carriers, reduced municipal revenue, and reduced local control over telecom infrastructure on public property—all without guaranteeing any extra broadband deployment for Americans.

New York City CIO Samir Saini previously accused the FCC of "handing taxpayer-owned assets over to multi-billion dollar telecommunications companies, and encouraging them to run wild on our public rights of way." Los Angeles, Seattle, and 22 other cities have sued the FCC to block the order.

Verizon's comments confirm what opponents of the FCC preemption said—that the FCC action provided no reason for carriers to invest more in rural areas. The FCC decision "presents a framework in which industry gets all the benefits (reduced fees to access state and local property) with no obligations to reinvest the resulting profits in rural broadband—even though the purported rationale for the reduced fees is that they will lead to new investment," former FCC Chief of Staff Blair Levin wrote in a blog post before the FCC vote. "At the same time, states and localities will be forced by federal mandate to bear all the costs and receive no guaranteed benefits."

"They are going as fast as they can without the preemption," Levin told Ars, in response to Verizon's recent comments. "The FCC action will have no material impact. In other words, everything the FCC said about how the new rules would speed things up was untrue."

The FCC claims its decision will "eliminate around $2 billion in unnecessary costs" from the $275 billion that carriers are expected to invest in next-generation wireless infrastructure over the next decade.

FCC Commissioner Jessica Rosenworcel, the FCC's only Democrat, said that this level of savings won't spur extra deployment, "because the hard economics of rural deployment do not change with this decision."

Verizon complaints helped FCC justify vote

Despite now saying that the order will have no effect on its 5G plans, Verizon previously urged the FCC to preempt the local fees and rules. The FCC justified its decision in part by pointing to comments from Verizon, while dismissing objections from municipalities.

Verizon states that a Minnesota town has proposed barring construction of new poles in rights-of-way and that a Midwestern suburb where it has been trying to get approval for small cells since 2014 has no established procedures for small cell approvals. Verizon states that localities in New York and Washington have required special use permits involving multiple layers of approval to locate small cells in some or all zoning districts. While some localities dispute some of these characterizations, their submissions do not persuade us that there is no basis or need for the actions we take here.

We asked Pai's office today to explain why the FCC decision is having no impact on the pace of Verizon's 5G deployment and will update this story if we get a response.

Promoted Comments

The FCC claims its decision will "eliminate around $2 billion in unnecessary costs" from the $275 billion that carriers are expected to invest in next-generation wireless infrastructure over the next decade.

Let's examine this. If you, as a consumer, were planning on spending $275, and were given a $2 off coupon, how much would that actively incentivive you to spend more money? Why would it be any different for a telecom?If it was me, I would be like "Ok, cool, I saved $2," and I would keep it, not feel like now I should spend it immediately.

1: If you have a scarce resource, dont make it less scarce.2: If you can instead get a bigger CEO bonus, do it3: MERICA!!!!!

/s

I've really searched the planned 5G rollout for work and couldn't help but notice that there's basically zero information about whether they'll keep mobile data caps the same. My inclination is to say yes (that or bumped up a bit, but not done away with completely) seeing as fallback to LTE is part of the 5G spec, as is using lower frequencies to cover less-dense areas.

Every time we had debates about cloud game streaming or poor ISP , people kept chuckling and saying "But 5G!!" This kind of thing is why I'm dubious about placing bets on major ISPs getting anything done in any time frame.

The Republicans in the FCC are straight up traitors. They betray the American people.

t;ftfy

That would have been partisan hack opinion 2 years ago. Now? it is obvious they are determined to stay put and unwilling to move their policies even an inch to the left, despite overwhelming majority of the population wanting them to. So they got two choices left: get voted out, or cheat to stay in power. They chose the latter.

Regardless of which carrier they use and how much they like it, consumers don’t switch providers very often.

When asked what their top reasons were for choosing their current carrier, 46 percent of those surveyed said it was because they were long-term customers.

In fact, 86 percent of those surveyed said they had been with their carrier for more than two years, with some of them citing the reliability of the provider’s service and others saying they thought about leaving but couldn’t find a better alternative.

Among those who did switch carriers within the past two years, over half said cost was the main reason. And nearly one-third of those who switched said they got more reliable network coverage or better reception by doing so.

I don't understand why people think Pai doesn't have evidence.Of course, Evidence exists, just its from an alternate reality.

It's less of a violation of Occam's razor to simply say Pai will be well paid by the telcos after he's kicked out for his raping of the American consumer while heading up what was created to be a guardian of both business and consumer interests, thus removing any potential for doubt about where his loyalties have always been.

I'm hoping that congress passes a law that saying any public employee may not be employed by any business over which they had any direct government influence for a period of no less than five years after leaving government service, and may not receive anything of value from those businesses during that time.

it's time we got rid of that gravy train for government employees, since it's patently obvious that they will benefit from that service at the expense of the people of the nation. They do this with binding contracts on business employees (can't work for a competitor). Why not for government officials charged with overseeing businesses who can (and usually do) offer them lucrative jobs once the official leaves government?

The FCC claims its decision will "eliminate around $2 billion in unnecessary costs" from the $275 billion that carriers are expected to invest in next-generation wireless infrastructure over the next decade.

Let's examine this. If you, as a consumer, were planning on spending $275, and were given a $2 off coupon, how much would that actively incentivive you to spend more money? Why would it be any different for a telecom?If it was me, I would be like "Ok, cool, I saved $2," and I would keep it, not feel like now I should spend it immediately.

1: If you have a scarce resource, dont make it less scarce.2: If you can instead get a bigger CEO bonus, do it3: MERICA!!!!!

/s

Also, they're aggressively offering buy-outs in preparation for large layoffs in their wireless / cellular segment. So I am curious who is going to build any of this 5G network in the first place.

The same people will do the installs, they'll just be working for another company as contractors.

That's actually what they are doing to a fair portion of their IT staff too - transfer to a third-party (Infosys) and move that expense right off the books.

Ha! Infosys. Among the most incompetent Indian outsourcing outfits I have ever dealt, though Wipro has certainly tried to compete in that race to the bottom.

I've always wanted to see what kind pandemonium a 2+ day cellular outage in a large city or entire US region would look like... Bonus points if they take out consumer and business internet, circuits, and MPLS.

For the most part, the general public has been shielded from knowledge of the incompetence and danger of outsourcing to certain companies. Shoddy software code in constant need of revision, isolated enterprise wide outages, and similar have been quietly swept under the rug to keep from nailing one company or another's share price. This will be an entertaining ride when it's public facing infrastructure.

Honestly, Pai shouldn't even bother with the obviously half-assed spin he tries to put on his policies. No one actually believes him when he tries to act like killing NN, getting rid of regulations, or screwing over local efforts to restore them is being done for some kind of benefit to the public.

He should cut the BS and just admit it's all for the sake of the big ISPs and telecoms. It seems to be a trend that modern GOP revels in flaunting their power and rubbing their opponents' noses in it. As long as they control all levels of the government, this behavior will continue. Vote accordingly.